Crawford & Company · NYSE:CRD.A
Crawford & — Q4 2015 Earnings Presentation
23 slides from Crawford &'s earnings presentation, Mar 10, 2016
Slide 1: Fourth Quarter and Full Year 2015 Earnings Conference Call
Fourth Quarter and Full Year 2015 Earnings Conference Call March 10, 2016 Crawford & Company
Slide 2: Forward-Looking Statements
PAGE 2 • Forward-Looking Statements —This presentation contains forward-looking statements, including statements about the expected future financial condition, results of operations and earnings outlook of Crawford & Company. Statements, both qualitative and quantitative, that are not statements of
Slide 3: Global Business Services Leader
PAGE 3 • One of the world's largest independent provider of global claims management solutions • Multiple globally recognized brand names: Crawford, Broadspire, GCG • Clients include multinational insurance carriers, brokers and local insurance firms as well as 200 of the Fortune 500 GLOBAL BUSINESS
Slide 4: Today's Agenda
TODAY'S AGENDA --- Welcome and Opening Comments --- Fourth Quarter and Full Year 2015 Financial Review --- Guidance and Strategic Initiatives
Slide 5: Revenues and Consolidated Operating Earnings
PAGE 5 Revenues ($ in billions) Consolidated Operating Earnings (1) ($ in millions) • Fourth quarter operating earnings grew 24%, year over year, to $19.0 million driven by strong results from Broadspire and U.S. Services. • Full year 2015 operating earnings declined 4% to $70.4 million compared to
Slide 6: Drive Improved Profitability and Predictable Results
PAGE 6 DRIVE IMPROVED PROFITABILITY AND PREDICTABLE RESULTS $45 million in total cost savings identified and removed through two restructuring plans during 2015 • Headcount reduction in U.S. Services and the U.K. • Senior management realignment to improve execution • GBSC migration and GAB Robins
Slide 7: Fourth Quarter and Full Year 2015 Financial Review
FOURTH QUARTER AND FULL YEAR 2015 Financial Review
Slide 8: Consolidated Income Statement, Three Months Ended December 31, 2015
PAGE 8 Unaudited ($ in thousands, except per share amounts) Three Months Ended December 31, 2015 2014 % Change Revenues Before Reimbursements $284,875 $285,455 — % Costs of Services Provided, Before Reimbursements 206,680 215,118 (4 )% Selling, General, and Administrative Expenses 62,256 57,900 8 %
Slide 9: Non-GAAP Net Income and Earnings Per Share
PAGE 9 NON-GAAP NET INCOME AND EARNINGS PER SHARE Unaudited ($ in thousands, except per share amounts) Net (Loss) Income Attributable to Crawford & Company Diluted (Loss) Earnings per CRDA Share Diluted (Loss) Earnings per CRDB Share Three Months Ended December 31, 2015 GAAP Earnings ($51,671 ) $ (0
Slide 10: U.S. Services Segment Highlights
PAGE 10 Revenues by Service Line ($ in millions) Cases Received by Service Line (In thousands) Operating Results (4Q 2015 v. 4Q 2014) • Revenues of $56.8 million versus $50.7 million • Operating earnings of $7.9 million versus $1.3 million • Operating earnings margin of 13.8% versus 2.5% • Cases rec
Slide 11: International Segment Highlights
PAGE 11 Revenues by Geographic Region ($ in millions) Operating Results (4Q 2015 v. 4Q 2014) • Revenues of $124.9 million versus $125.6 million • Exchange rates reduced revenues by 13% • Operating earnings of $7.3 million versus $9.6 million • Operating earnings margin of 5.9% versus 7.6% • Cases re
Slide 12: Broadspire Segment Highlights
PAGE 12 Revenues by Service Line ($ in millions) Broadspire Cases Received (In thousands) Operating Results (4Q 2015 v. 4Q 2014) • Revenues of $75.4 million versus $69.2 million • Operating earnings of $7.0 million versus $6.3 million • Operating earnings margin of 9.3% versus 9.1% • Cases received
Slide 13: Garden City Group Segment Highlights
PAGE 13 Backlog ($ in millions) Operating Results (4Q 2015 v. 4Q 2014) • Revenues of $27.7 million versus $40.0 million • Operating earnings of $1.7 million versus $4.5 million • Operating earnings margin of 6.1% versus 11.3% • Backlog at $81 million versus $102 million Highlights • Deepwater Horizo
Slide 14: Balance Sheet Highlights
PAGE 14 Unaudited ($ in thousands) December 31, 2015 December 31, 2014 Change Cash and cash equivalents $76,066 $52,456 $23,610 Accounts receivable, net 164,596 180,096 (15,500 ) Unbilled revenues, net 98,659 103,163 (4,504 ) Total receivables 263,255 283,259 (20,004 ) Goodwill 95,616 131,885 (36,26
Slide 15: Operating and Free Cash Flow
PAGE 15 Unaudited ($ in thousands) 2015 2014 Variance Net (Loss) Income Attributable to Shareholders of Crawford & Company $ (45,488 ) $ 30,624 $ (76,112 ) Impairment of Goodwill 49,314 — 49,314 Depreciation and Other Non-Cash Operating Items 50,374 54,267 (3,893 ) Unbilled and Billed Receivables Ch
Slide 16: 2016 Guidance
PAGE 16 Crawford & Company is issuing its initial guidance for 2016 as follows: YEAR ENDING DECEMBER 31, 2015 Low End High End Consolidated revenues before reimbursements $1.05 $1.10 billion Consolidated operating earnings $80.0 $90.0 million Before expected restructuring charges, net income attribu
Slide 17: Looking to 2016
PAGE 17 LOOKING TO 2016 Continue to exhibit cost discipline Be more client centric • Deliver customized value propositions to clients • Increase the speed of doing business enterprise wide Drive synergies in strategic initiatives Capitalize on cross-sell opportunities across the company
Slide 18: Appendix Full Year 2015
Appendix FULL YEAR 2015
Slide 19: Non-GAAP Measures and Reimbursements for Out-of-Pocket Expenses
PAGE 19 Measurements of financial performance not calculated in accordance with GAAP should be considered as supplements to, and not substitutes for, performance measurements calculated or derived in accordance with GAAP. Any such measures are not necessarily comparable to other similarly-titled mea
Slide 20: Reconciliation of Non-GAAP Items
PAGE 20 RECONCILIATION OF NON-GAAP ITEMS Full Year Revenues and Operating Earnings Unaudited ($ in millions) 2015 2014 Revenues Before Reimbursements Total Revenues $ 1,242 $ 1,217 Reimbursements (72 ) (74 ) Revenues Before Reimbursements $ 1,170 $ 1,143 Unaudited ($ in thousands) 2015 2014 Operatin
Slide 21: Reconciliation of Non-GAAP Items: Quarter and Guidance
PAGE 21 Quarter Ended Quarter Ended Full Year December 31, December 31, Guidance Unaudited ($ in thousands) 2015 2014 2016 * Revenues Before Reimbursements Total Revenues $ 300,504 $ 305,642 $ 1,155,000 Reimbursements (15,629 ) (20,187 ) (80,000 ) Revenues Before Reimbursements $ 284,875 $ 285,455 $
Slide 22: Reconciliation of Non-GAAP Items: Net Debt
PAGE 22 RECONCILIATION OF NON-GAAP ITEMS (cont.) Net Debt December 31, December 31, Unaudited ($ in thousands) 2015 2014 Net Debt Short-term borrowings $ 19,958 $ 2,002 Current installments of capital leases 1,959 763 Long-term debt and capital leases, less current installments 225,365 154,046 Total
Slide 23: Non-GAAP Adjusted Net Income and Diluted Earnings Per Share
PAGE 23 RECONCILIATION OF NON-GAAP ITEMS (cont.) Non-GAAP Adjusted Net Income and Diluted Earnings Per Share Three Months Ended December 31, 2015 Unaudited ($ in thousands) (Loss) Income Before Taxes Income Taxes Net (Loss) Income Net (Loss) Income Attributable to Crawford & Company Diluted (Loss) E